Interesting points.
Assuming (worst case scenarios) duties are applied.
Based on the table, countries proximity (read:logistics) the US i.e Canada (Advantage due to Free trade agreement), Chile,Brazil - wouldn’t they become price competitive to Pokarna . I mean would Pokarna still be the lowest cost producer i.e also factoring the 345% duty mentioned by @kanvgarg123
View invited.
Disclosure : Invested .
Per management interview transcripts, the business is not just about cost. They claim that the competitive advantage stems from keen sense of fashion. Can members confirm whether they benefit from such positioning? Basically is it only a commodity business with low cost being only advantage?
If consumers perceive value, it won’t always only be about cost.
Comments?
Hello Ayush,
I tried to find out the duty on three countries as you mentioned in the reply
China - 311-500% (Summation of CVD and ADD)
Turkey - 90% (Proposed)
India - 345% (Proposed)
I couldn’t find anything on ADD and CVD on South Korea. If the current landed price of Turkish and Indian Quartz is in the similar range, then India tends to lose given they both use Bretton Stone Technology. Given that the Chinese products were itself 30-40% cheaper before the ADD, I guess they would now become competitive again if the proposed ADD gets imposed.
Also, I am not sure how international trade laws function since US applies ADD to any country it wants and at its own discretion.
Regards
Kanv
ASHISH KACHOLIA has exited this stock by selling1542712 shares. 
Any update on the Anti dumping duty?
One update expected on Aug 1. If they will continue further investigation. Will update soon.
Just skimmed through the discussion for important point. Highlighted some relevant discussions.
conference-quartz_ii_-_05-29-19.pdf (926.5 KB)
Looks like Pokarna is fighting the case along with some importers who have established long term sourcing agreements with Pokarna. It was mentioned multiple times in the discussion that Quartz surface market is growing really well in USA and at the same time, the capacity in USA is not enough to meet the demand.
Product specific technical discussion is something which is tricky to comprehend, I would wait and watch on this development.
Disc:
had sold my stake in pokarna when this case was filed, no holding
Correct. Another important point is, Cambria serving high-end clients and that, other players were not present for the discussion.
You mean ‘capacity is NOT enough’
Thanks for sharing the document @coolcarney @Pratik_Patel9 - one never knows how the case progresses etc and what the outcome can be especially when there is protectionism. But it was good to see that Pokarna and many other cos are defending their case and while on the opposite it seems to be just one company.
Also, in several of the discussions, there were good things about Pokarna - it being a contract manufacturer to several US cos (fabricators) and how the quality is good…also as a product there is lot of differentiation by way of designs etc. Its not a simple commodity.
Latest update below.
In May, since the announcement on India and Turkey imports, China imports in US grew, which were declining since then. Need to confirm if this is the trend.
Need to wait for a quarter or so to determine the precise outcome. Expecting excellent results on Aug 9.
Hey guys, I am fairly new to the forum. This is clearly one of the best threads that I have come across till now. People have done some amazing scuttlebutt and I have come to know this company a lot better. Here is another link that might help you understand the petition filed by Cambria a lot better. It is the report prepared by the USITC.
I have read the transcript entirely posted by @coolcarney and I feel that the opposition (India and Turkey) have a more solid ground than the petitioners (Cambria). However, it didn’t come to me as a surprise that all the 5 members of the committee voted in affirmative to take the proceedings ahead (decision due on 24th Oct), given the current environment and judgments on anti-dumping duty. Moreover, one should read this transcript cautiously (even though it’s long) and try to understand the underlying sentiments of both the parties. It is also a good document to understand the quartz industry in the US. While the opposition establishes (in the hearing) that the petitioner lacks evidence of data to show that imports are causing material injury to the domestic business in the US, the report prepared by the commission has a rather different tone. It is very difficult to gauge whether the commission will impose an anti-dumping duty or not.
wonderful set of q1 results. revenues of 127 cr vs 87 cr yoy , mainly driven by increase in quartz business.
PAT of 30 cr .
shows that if the anti dumping duty isnt imposed sky is the limit for the company. can expect the whole year results to be this strong easily.
company is at a market cap of 400 cr , with earnig expected to be greater than 100 cr this year easily.
Disc - Invested.
QUARTZ SURFACES
Total : 15,406,747 ft² (+2.7%)
Sector Leader: India, 3,589,987 ft² (+596.8%)
Backfill: Given the 300%-plus tariffs in effect on Chinese quartz surfaces, it’s stunning the sector showed any growth in June. The catch is that market players took advantage of a loophole that allowed a waiver of the new tariffs for most of May and all of June. That waiver window closed on July 5, so expect China’s shipments to drop significantly in coming months.
| Jun-19 | Jun-18 | Change | ||
|---|---|---|---|---|
| — | — | — | — | |
| TOTAL | 15,406,747 | 15,007,320 | 2.7% | |
| India | 3,589,987 | 515,203 | 596.8% | |
| China | 3,565,079 | 9,960,709 | -64.2% | |
| Spain | 3,118,237 | 1,962,141 | 58.9% | |
| Turkey | 1,179,024 | 283,607 | 315.7% | |
| Israel | 911,993 | 606,417 | 50.4% | |
| Vietnam | 676,640 | 580,346 | 16.6% | |
| Canada | 602,725 | 445,184 | 35.4% | |
| Italy | 442,515 | 161,200 | 174.5% | |
| South Korea | 295,523 | 60,579 | 387.8% | |
| Taiwan | 222,856 | 614 | 36222.8% | |
| Brazil | 171,092 | 47,393 | 261.0% | |
| Germany | 165,710 | 14,004 | 1083.3% | |
| Czech Republic | 144,495 | 38,890 | 271.5% | |
| Portugal | 123,333 | 248,937 | -50.5% | |
| Malaysia | 82,753 | 0 | N/A | |
| Belgium | 38,513 | 17,868 | 115.5% | |
| Thailand | 28,223 | 0 | N/A | |
| Mexico | 16,566 | 4,306 | 284.8% | |
| Hong Kong | 15,188 | 57,695 | -73.7% | |
| Estonia | 11,334 | 0 | N/A | |
| Algeria | 3,186 | 0 | N/A | |
| Indonesia | 1,184 | 0 | N/A | |
| Japan | 291 | 0 | N/A | |
| Poland | 258 | 0 | N/A | |
| Norway | 43 | 0 | N/A | |
| Romania | 0 | 1,485 | -100.0% | |
| France | 0 | 743 | -100.0% | |
| Source: U.S. International Trade Commission, Stone Update analysis |
Didn’t get you…
It sounded contradictory …
will India benefit further?
It is stone update notes…not from me please…
Pokarna AR 19 notes
Total revenue – 471 cr vs 343 cr ( 37 % yoy growth)
PAT at 81 cr vs 43 cr
D/E – 0.67
Granite business is becoming competitive with limited entry barriers.
Granite business margins are unpredictable , it is not possible to know about material quality without quarrying the rock. Hence wastage can sometimes be more , sometimes less. In this year the wastage was on the higher side resulting in higher costs for granite business
We are seeking ways to reduce our costs of quarrying in each of our quarries and enhance our productivity through investments in equipment and technology and maintaining a flexible workforce.
The Board of the Company has decided not to pursue restructuring solution for Apparel business as despite continuous efforts, no attractive restructuring solution could be identified.
Accordingly, Apparel business has been reclassified from discontinued operations to continuing operations in the financial statements.
Company trying hard to turnaround Apparel business.
All future growth aspirations dependent on quartz business, business at an exciting point right now.
All focus on bringing the greenfield expansion in this segment.
Participated in various trade shows across USA and China.
US ,China & India are major markets for granite business
80 % of India’s granite exports are to China.
Chinese enterprises process Indian material for domestic consumption and also export significant quantity of processed granite to the US.
The U.S. Trade Representative (USTR) in March 2019 announced that the United States (US) intended to terminate India’s status from Generalized System of Preferences (GSP) program
Termination of India’s status as a beneficiary developing country under the GSP program would mean that Company’s Granite slabs and cut to size products when imported into the US may be subject to certain safeguard measures or levies
India’s export of quartz surfaces products to the US increased from US$ 38.69 million to US$ 69.54 Million.
In May 2019, a U.S. producer petitioned the U.S. Department of Commerce and the U.S. International Trade Commission to investigate alleged dumping by and subsidies to Indian producers and to levy countervailing and anti-dumping duties against quartz surfaces imports from India
Pokarnia is fighting against this and believes the allegations are unjustified.
Oct 2019 annd Dec 2019 a preliminary determination will be made on this matter and by April 2020 a final call will be taken.
PESL started supplying products to IKEA in India .
PESL is working on creating the groundwork and platform for offering stone installation and maintenance related services in India to retail and other institutional clients.
Apparel business generated revenues of 729.47 lakhs as against 846.04 lakhs in FY2018.
The division’s revenue was entirely derived from domestic market. EBITDA for the segment stood at 274.50 lakhs as against 317.60 lakhs in FY2018
Ashish Kacholia reduced his stake from 7.48 % to 4.98 %
Thanks for the summary. I went through the AR.
The new plant becomes operational by March 2020. The capital work in progress as on 31/3/19 is about 55 crores. Cost of the new plant is about Rs 300 crores. When will the debt for this new plant be seen on the balance sheet?
The company has about 400 employees and a salary expense of about Rs 40 crores. This seems to be disproportinately high considering that the median salary is about Rs 1.2 lakhs / year. Looked at the management compensation and saw that Mr. G. Jain’s salary has jumped from 1.8 Cr in FY18 to Rs 4.8 Cr in FY19.
Related party transactions (Rent, salary, but interest being the biggest) are concerning but have been there for many years.
The company’s debt is down, networth is up, company is trading at MCap < Revenue and at less than 4 times earnings. The new plant coming up in 6 months is likely to bump the revenue up by 100% and profits proportinately. What are we missing?
Disc: Invested since 3 years
Can anyone answer these following questions?
